Grain and livestock futures end mixed on Monday.
Vince Boddicker, Farmers Trading Company, says corn made new highs for the move Sunday night into Monday with fund buying after the highest weekly close in six months.
Dry extended forecasts for parts of Argentina and Southern Brazil also fueled the fire for both corn and soybeans.
However, corn ran into chart resistance causing some profit taking and farmer selling.
“One of the things that we’ve been watching is $4.65 1/4 in July corn, we need to close above that level and we were not able to do that on Monday,” he says.
However, he thinks its a short term setback and says historically if the grain market rallies between Christmas and New Years it will keep going after the start of 2025.
“Plus, the grain markets feel better than they did a week ago,” he adds.
Boddicker believes corn could move to $4.70 - $4.80 by spring and there’s an outside shot the market could even test $5.
What will it take to get there?
Boddicker says it depends on several factors.
1. Fund Length - How much farther do the funds want to push the long side of the corn market?
2. Farmer Selling - What amount of farmer selling occurs as prices get close to $5? Will it be enough to cap the rally especially after the first of the year when farmers may sell for income averaging purposes?
3. Demand - Can export and ethanol demand remain robust, especially if prices move higher?
4. Global Production - Dryness in Argentina or areas of the Black Sea region.
Soybeans also saw early double digit strength on fund short covering end of year and on strength in the soybean meal market with dryness in areas of Argentina.
However, that market also ran into technical selling at resistance areas on the charts.
Soybeans have rallied well off the contract lows scored earlier in December and Boddicker thinks that has also attracted some fund short covering.
This may mean that the most bearish expectations for South America’s record crop are factored into prices.
Meal has also seen short covering off recent contract lows as the funds were record short and are building some concern about Argentina’s dry extended forecast.
Wheat futures held slight gains with funds covering short positions and taking profits end of quarter and end of year.
Cattle futures were mixed on the close.
Live cattle had early strength with higher cash last week and higher cutouts and that supported the December contract, but the back months saw profit taking and hedge pressure trim gains into the close.
Feeder cattle ended higher but also off session highs.
Lean hog futures saw losses of $2 to $2.50 on continued fund long liquidation and profit taking.
